Posted by: jhamon | September 29, 2009

MysteryHedgie: Behold The Flattening Yield Curve!

MysteryHedgie draws our attention to the flattening yield curve and its implications…

Not widely discussed is the flattening of the US yield curve (see below – 10 year less 2 year yield), caused primarily by the rally in the “long end”, as the Fed has stated its intention to leave short rates close to zero for an extended period.

Intuitively this flattening could be viewed as a sign of economic softness ahead. This is all the more interesting given that there have been whispers that Friday’s NFP could be a positive number, as against expectations of -200k. Expect equities, commodities and the US$ to take their cues from the bond market in coming days; Friday’s report is more important than usual.

The Yield Curve Flattens

The Yield Curve Flattens

Advertisements

Responses

  1. Despite following the equities market for quite a while now I have no idea what you’ve just posted above. What sort of things should I read up on to get a clue on what you were talking about above? Or would you care to elaborate a little?

  2. […] MysteryHedgie: Behold The Flattening Yield Curve!  – Not widely discussed is the flattening of the US yield curve (see below – 10 year less 2 year yield), caused primarily by the rally in the “long end”, as the Fed has stated its intention to leave short rates close to zero for an extended period.  Intuitively this flattening could be viewed as a sign of economic softness ahead. – Outside the Box Blog […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: